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Bitcoin Price Analysis: A Plunge to $56K Is Possible if BTC Fails to Overcome This Resistance

Summary:
Bitcoin’s price has yet to recover from the recent drop, consolidating without a clear indication of its future direction. However, there are some signs that it could drop further if it’s unable to overcome ,000 soon. Recall that the largest digital asset slumped hard on Tuesday, dropping from over ,000 to ,000, before recovering slightly to its current levels of ,000. Technical Analysis By TradingRage The Daily Chart On the daily timeframe, the asset has recently been rejected from the 200-day moving average and the K resistance level. It has also broken below  K and is seemingly on its way toward the K support zone. The RSI has also dropped below 50%, indicating that the momentum is gradually shifting bearish once again. Considering the current

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Bitcoin’s price has yet to recover from the recent drop, consolidating without a clear indication of its future direction. However, there are some signs that it could drop further if it’s unable to overcome $60,000 soon.

Recall that the largest digital asset slumped hard on Tuesday, dropping from over $63,000 to $58,000, before recovering slightly to its current levels of $60,000.

Technical Analysis

By TradingRage

The Daily Chart

On the daily timeframe, the asset has recently been rejected from the 200-day moving average and the $64K resistance level. It has also broken below  $60K and is seemingly on its way toward the $56K support zone.

The RSI has also dropped below 50%, indicating that the momentum is gradually shifting bearish once again. Considering the current market structure, a decline toward the $56K level and even the $52K support zone is not unlikely.

The 4-Hour Chart

The 4-hour chart clearly shows the recent rejection from the $64K resistance level, as the market has failed to demonstrate a strong rally higher. The price is currently retesting the $60K zone from the downside, and if it fails to reclaim the level, a drop toward the $56K zone will be imminent.

Yet, if it climbs back above the $60K level, investors could be optimistic that it can again run toward the $64K resistance zone and potentially higher toward $68K in the coming weeks.

On-Chain Analysis

By TradingRage

Bitcoin Funding Rates

With Bitcoin’s market structure showing willingness for more bearish price action, many market participants have shifted their perspective toward the overall crypto scene. This is also clearly evident in the funding rates metric.

This chart demonstrates the BTC funding rates metric, which measures whether the buyers or the sellers are executing their futures positions more aggressively. Positive values point to bullish sentiment, while negative ones indicate bearish sentiment.

As the chart suggests, the Funding Rates show negative values, indicating that the futures market sentiment is now bearish. While this can also be a sign that a price bottom is close, BTC can still drop lower in the short term without sufficient spot demand.

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